Posted: Sun Sep 09, 2007 7:59 pm Post subject: Customer Rating Systems, The Good, the Bad and the Ugly?
Most companies use rating systems to classify their customers into groups, but many firms misuse their methods. One common mistake is that business owners force customers and prospects into catagories that the business wants them in, then treats them as such, no matter how awkward it might be.
After all, who would want to be catagorized as in a 'Willing to buy anything we tell them' group? Much less would anybody want to be thought of as in the 'Cheapskate' group. Even though the business might assume the former catagory is a compliment and the later a snub, both are really insulting to any thinking, breathing person that spends money.
Furthermore, as a general rule across most businesses, the 'best customers' and the 2nd and 3rd best layers of customers only pay the firm's overhead. Any true profit comes from dealing with that last segment, the more time-consuming, difficult to satisfy buyers.
So if they lost that last, least-desireable segment of customers they would be reduced to barely making ends meet.
But the main point I wanted to make is that any repeat customer's attitude toward the business is largely a reflection of the firm's attitude towards them in the past. So simply repaying their attitude back to them is simply perpetuating a vicious cycle.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Mon Sep 10, 2007 12:34 pm Post subject: Re: Customer Rating Systems, The Good, the Bad and the Ugly?
Hi Bud,
Bud wrote:
Most companies use rating systems to classify their customers into groups, but many firms misuse their methods. One common mistake is that business owners force customers and prospects into categories that the business wants them in, then treats them as such, no matter how awkward it might be.
You make a good point. This has always been a pet peeve of mine. Predetermined destiny. "This guy is a "D" client so he's not worthy of my service." What a crock!
Bud wrote:
After all, who would want to be categorized as in a 'Willing to buy anything we tell them' group? Much less would anybody want to be thought of as in the 'Cheapskate' group. Even though the business might assume the former category is a compliment and the later a snub, both are really insulting to any thinking, breathing person that spends money.
Furthermore, as a general rule across most businesses, the 'best customers' and the 2nd and 3rd best layers of customers only pay the firm's overhead. Any true profit comes from dealing with that last segment, the more time-consuming, difficult to satisfy buyers.
Great point! The difference between being slow and being slammed is about two jobs a day in many shops.
Bud wrote:
So if they lost that last, least-desireable segment of customers they would be reduced to barely making ends meet.
But the main point I wanted to make is that any repeat customer's attitude toward the business is largely a reflection of the firm's attitude towards them in the past. So simply repaying their attitude back to them is simply perpetuating a vicious cycle.
Amen, treat them like bums and that's how they act. I have heard of shops that actually keep track of how much each client spends so they can "decide" who gets what kind of service. Talk about a super-highway to nowhere.
Why not treat everyone great and see if those low spenders don't become larger spenders? If the number of bad clients is high enough to track, I think a business needs to be asking itself some VERY serious questions.
Like most shops we have some clients that use our service for everything they need. Others only buy tires, others only come for transmission work and so on. The thought that they are somehow "my" clients and have been disloyal by going elsewhere is ridiculous.
People are "their own" clients and do us a favor by using our service. We do them no favor by serving them, they pay us for that.
I have two client ratings:
Clients
Non-clients at this time
A non-client is a person whose specifications I cannot meet, at this time. For instance they need it right now and I have a ten-day backlog. Squeezing them in is NOT good service. It is bad service to the folks that get put off because this was squeezed in. It is also a disservice to the technician who has to rush to try to accommodate the over-booking.
Handled properly I may have the opportunity to serve them in the future. They are deserving of the same consideration as everyone else, in my opinion. Sorry for the rant and thanks Bud for a great post.
I see this every day and wonder how management sees this as doing good business.The so called "good" customers are the ones that dont question price or shop around so they get some perks tossed their way.Lets face it,the customer with the 1990 firefly wants the same quality and service as the one with the 2004 town car.Why do they think guoging a hit and miss customer will make him want to be a regular? I wouldnt! Thanks Bud
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Wed Oct 03, 2007 2:20 pm Post subject:
Jason wrote:
I see this every day and wonder how management sees this as doing good business.The so called "good" customers are the ones that dont question price or shop around so they get some perks tossed their way.Lets face it,the customer with the 1990 firefly wants the same quality and service as the one with the 2004 town car.Why do they think guoging a hit and miss customer will make him want to be a regular? I wouldnt! Thanks Bud
Hi Jason,
I just noticed this line in your reply. I think this speaks volumes. It may be easy to treat folks that we consider "regulars" nice. We realize they provide our income. What may not be as easy to see is, "Why aren't the other folks also regulars?"
Could it be I'm not as nice as I could be to them? A great point and one worth consideration. Thanks.
Joined: 15 May 2007 Posts: 774 Location: Baton Rouge, LA
Posted: Wed Oct 03, 2007 3:17 pm Post subject:
MattFMN wrote:
I can't believe you missed the most despicable of all client classifications: the Bottom-Feeder.
Evidently, the class system hasn't died....
Later, Matt.
Hi Matt,
"Bottom feeder" being someone that disagrees or questions crap a shop is trying to feed them? The entire A - D system always seemed ludicrous to me. How many clients actually try to get over on a business? I think if the number is more than one every five years are so, the business has some serious issues.
I remember a particular "consumer commando." He once stated, "Business is like walking through a mine field!" I guess, just because you're paranoid doesn't mean people aren't out to get you.
I wrote a long post on it once, I may need to look it up and post it again.
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The entire A - D system always seemed ludicrous to me. How many clients actually try to get over on a business? I think if the number is more than one every five years are so, the business has some serious issues.
